Nvidia’s New Whip

Good morning and happy Friday.

Gen Z has digested one lesson more than other age cohorts: Good eats come to those who wait. 

A new survey from The New Consumer and Coefficient Capital found that 60% of Zoomers stood in line for at least a half hour or more to eat a specific food or at a specific restaurant, the most of any age group. Some 92% of Gen Z respondents said the wait was worth it, and 74% said they'd wait that long again. While we wish we could draw some deeper conclusion about how this displays some remarkable resilience or dedication by this somewhat-enigmatic demographic, we suspect the root cause is far simpler: Younger people have more free time on their hands (and now they have Instagram accounts to feed, too).

Nvidia wants to plug some more horsepower into the autonomous car industry. (The term "horsepower," by the way, was invented in the 18th century to demonstrate the superiority of steampower, so we think it'll survive the EV revolution, too.)

Bloomberg reported on Thursday that AI darling Nvidia has been busily growing its workforce, including adding 200 workers in China dedicated to researching autonomous vehicle (AV) tech. Thus far, Nvidia has been propelled to unbelievable heights by making itself an integral part of the supply chain for generative AI tech. Now it would seem it's eyeing how it can embed itself deep into other futuristic tech bets.

Coming Up the Inside Track

Sources told Bloomberg that Nvidia increased its total China headcount this year from roughly 3,000 to roughly 4,000. That means the additions to its China-based AV team account for about 20% of its total hires in the country this year, a meaty chunk given AV tech is not Nvidia's bread-and-butter at the moment. That said, Nvidia has been a major part of self-driving car makers' operations for a while. We got a glimpse of that in June when Elon Musk requested Nvidia divert a shipment of AI chips originally bound for Tesla to X and his nascent AI company, xAI.

There's plenty of overlap between AI and self-driving technology, and Nvidia isn't getting stuck on just the supply side of the equation. In May, the company participated in a $1.05 billion funding round for UK-based self-driving tech startup Wayve. The location of Nvidia's new research team might tell us a bit more about where it sees the future of autonomous driving:

• China has been aggressively pushing AV technology, testing more driverless cars than any other country, according to a June report from The New York Times. Robotaxi services are spreading in the Middle Kingdom too, with driverless taxis proliferating in the city of Wuhan (to be fair, if we were Wuhan, we'd want to be known for something other than what it's currently best-remembered for).
• Getting tech in and out of China could prove a little contentious going forward, as US President-elect Donald Trump and Beijing ready themselves for a trade war tit-for-tat. Semiconductors are currently at the heart of the geopolitical theatre du jour, but China's domestic market for autonomous vehicle tech is so massive that Nvidia might not be too concerned about exporting it straight away.

Losing Cruise Control: This week saw a major withdrawal from the robotaxi space when GM said it would shut down the robotaxi part of its majority-owned self-driving company Cruise and absorb the rest of Cruise into itself. For Microsoft, another beneficiary of the AI hype-cycle, GM's shuttering of Cruise meant taking an $800 million charge, as it participated in a minority investment round in 2021. Conversely, the news was music to the ears of Google — owner of robotaxi service Waymo — which was already enjoying a share bump this week thanks to its shiny new quantum-computing chip.

Written by Isobel Asher Hamilton

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The Fed may have cracked inflation, but eggflation is proving harder to beat.

The Labor Department said Thursday that US producer prices climbed 0.4% in November, the largest rise in five months and more than economists anticipated. The culprit was higher food costs, and especially a 55% surge in the wholesale price of eggs. Nevertheless, egg producer stocks are fluffing up like an Alpine Cheese soufflé.

Breakfast of Market Champions

For consumers, the cost of a dozen eggs rose 8.2% last month to $3.65, which is up ​​37.5% year-over-year. At fault is the highly, highly transmissible avian bird flu: Outbreaks have popped up across the country this year, impacting 50 commercial poultry flocks as of November 18 and over 25 million birds. In the last week alone, outbreaks were reported in Missouri, Colorado, Idaho, California, Wisconsin, Oklahoma, Iowa, and Nebraska.

Farms are required by law to cull whole flocks — sometimes millions of birds — if the disease is found. The current price uptick is similar to a 2022 rise in egg prices, when flu outbreaks put a massive dent in the number of laying hens available to producers. For some, however, it's been a golden egg: 

• Thanks to rising prices, shares in the two largest publicly traded egg producers have made the S&P 500's 27% gain this year look like an empty shell: Cal-Maine Foods is up 84% in the same period and rival Vital Farms has climbed 135%. Unlike a chicken, Cal-Maine's profits took flight in its latest quarter, with a net income of $150 million compared with $926,000 a year earlier. Vital's jumped to $7.4 million in its latest quarter, from $4.5 million a year earlier.
• The price of a dozen eggs is still 24% below the all-time high of $4.82 set in January 2023, and that record doesn't seem to be in danger at the moment, depending on how avian flu is managed in the coming months. In fact, the new data did nothing to lift the share prices of Cal-Maine, which was flat, and Vital, which was down 5%, on Thursday.

Keep Clipping Coupons: The good news for everyone is that Bank of America estimates, based on the latest Labor Department data, that core personal consumption expenditures (PCE) — that is to say, with food and energy costs removed — rose just 0.1% in November, down from a 0.3% increase in the prior two months. The bank called that a "relief" that eases worries "about the recent trajectory of inflation." The bad news for consumers, as President-elect Donald Trump acknowledged Thursday, is that it's not gonna be easy to bring food prices down.

Written by Sean Craig

Walmart is taking an all for One, One for all approach to fintech.

On Thursday, sources told Bloomberg that the big box retail titan led a $300 million funding round for One, the fintech startup in which it holds a majority stake, at a $2.5 billion valuation. Besides being your one-stop-retail-shop for everything, Walmart would like to be your virtual banker, too.

All in One

In 2021, Walmart crashed the fintech party by launching a joint venture with Ribbit, the prominent venture capital firm that has backed platforms like Robinhood and Revolut (Ribbit participated in Thursday's funding round, too). Through a series of mergers and acquisitions, that platform eventually became One, an independent startup mostly owned by Walmart that offers products like debit cards and buy-now-pay-later services. Sources also told Bloomberg that when Walmart reissues its credit card with a new banking partner next year, it will be launched by One.

If Walmart intends to be the Bank of Walmart, it has certain built-in advantages: 

• One currently offers early wage access to Walmart's 1.6 million employees. The company said it has 3 million monthly active users overall.
• Meanwhile, Bloomberg reports that One has a run-rate revenue of more than $200 million and is processing over $15 billion in payment flow.

One Day More: One is headed by former Goldman Sachs partner Omer Ismail, who previously ran Goldman's ill-fated consumer banking unit. If Ismail wants to rub elbows with the masses, Walmart seems a much better fit.

Written by Brian Boyle